“We’re looking at various tax rate deductions but I’m looking at that all the time … that’s one of the reasons we’re in such a strong economic position. We’re, right now, the No. 1 country anywhere in the world by far as an economy,” Trump told press during a White House meeting with Romanian President Klaus Iohannis.
“Payroll tax is something that we think about and a lot of people would like to see that, and that very much affects the workers of our country,” Trump said, but cautioned that he’s “not looking to do anything at this moment” as it relates to those potential tax cuts.
Multiple senior officials told CNN they weren’t aware of the payroll tax break discussions — revealing what an early stage the talks have been in.
A White House official denied to CNN on Monday that the move was under consideration “at this time.”
“As Larry Kudlow said yesterday, more tax cuts for the American people are certainly on the table, but cutting payroll taxes is not something under consideration at this time,” the official said in a statement.
Tax policy analysts argue the timing of a payroll tax cut when unemployment is at a historic low and the economy is on solid ground would be a waste of ammunition in the event of a future downturn.
“There’s no economic reason for it right now. Unemployment is extremely low and the economy is slowing a little bit, but it’s slowing from an artificially higher rate from the last round of tax cuts,” said Benjamin Page, a senior fellow at the non-partisan Tax Policy Center.
During a downturn, administrations have used one-time tax credits, like former President George W. Bush did in 2001, which deployed rebate checks of up to $600 to Americans.
The Trump administration would also need the support of Congress to make such a change, which analysts suggest might be difficult in the Democratically controlled House.
Millions of American employees pay 6.2% of their salary in “payroll taxes,” which are usually used to fund social safety net programs — such as Social Security and Medicare.
It would not be the first time a sitting president has used it as a political maneuver.
Rather than paying a 6.2% payroll tax, they paid 4.2%, putting an extra $83 a month in the pockets of American workers making $50,000, for example.
Payroll tax cuts, like all tax cuts, grow the deficit in the short term. But they are appealing to aides worried about a potential recession because they are widely popular and are designed to boost American spending, which accounts for about two-thirds of the economy.
“A payroll tax would definitely reduce federal revenue and add to the federal deficit,” Kyle Pomerleau, chief economist at the Tax Foundation, told CNN.
CNN’s Jim Acosta and Veronica Stracqualursi contributed to this report.